] HipMojo.com » M&A Amongst Blog Networks and The Case Against VC Funding in Blogs?

M&A Amongst Blog Networks and The Case Against VC Funding in Blogs?

For as long as I can recall, Rafat Ali does not stoop down to the blogosphere’s level of mixing personal topics (even if they are related to his business) with business topics he covers, even when he / his company are in the news.

This morning, that stopped. Michael Arrington commented on how blogs should not raise financing and instead merge to take on CNET (I agree raising VC for most blogs is crazy, and Rafat’s VC round was more angel money than VC funding, but I digress). He suggested that Ali was looking at raising money or selling. Ali countered, vocally and publicly.

CNET is currently duking it out in the courts against Jana Partners, but the company has ventured into blogs hard and remains a $400M a year revenue generating machine. I respect all of these blog publishers who have created mini-empires but I think this is Arrington’s smart way of generating noise and grabbing attention, the very same techniques that have propelled him to the elite of technology-oriented blog networks.

Revently, we ranked these blog networks, and Ali’s Context Next Media ranked #2, Arrington’s Tech Crunch ranked #3? Who was #1? The answer to that question reveals - why I think Arrington posted what he did.

Diversification Counts

From my vantage point,

- the vast majority of blogs rehash and repeat the same underlying content, the elite might not, but what passes as an elite blogger is a rather subjective topic, and Arrington, to his credit, outlines the intangible barriers and politics that define one as such;
- moreover, a few fail to offer any material analysis, meaning that long term they lose relevance;
- not only is the content repetitive, the massive overlap in users is amazing and from an advertising perspective, this is the key…

This is why - Henry Blodgdet’s brand notwithstanding - Silicon Alley Insider has made strides because it talks about something other than the latest API.

And yes, to some extent, the overlap in audience and readership has shot up since TechMeme weaves these blogs together. Were it not for Gabe Rivera’s site, would you really know what would be going on in half of these sites? I would not. As more and more turn to Tech Meme to distill their news, they read the same stuff from the same people with the same slant. Over time, these blogs lose authority and relevance, they do not gain it.

Do not get me wrong: I think Ali, Om Malik, Michael Arrington, as well as the publishers of the other blogs are NOT going anywhere, but while some of their sites will merge or sell… the fact remains that the houses they have built remain hollow for the massive concentration in focus on technology. So the people have made their marks but do we need 8 blogs covering video? Or 6 covering Web 2.0? I don’t think so.

I criticize VCs 24/7 because as a online video content producer, I find their lack of understand of media, publishing and advertising sales frustrating. But that is my problem for launching a company that does not fit with traditional VCs profile. In the same vein: I agree with Arrington that VCs and blog networks do not go hand-in-hand.

But to suggest that merging into a colossus is equally foolish. In fact, because the barriers to entry in the blog space is non-existent (we’re talking a Wordpress/Movable Type blog and getting on Tech Meme) then VCs balk at the concept.

Exasperating matters, I think, is the that after a few years of accelerating technology-oriented ad sales, the rise in options for media buyers has made some of them take pause and re-assess where to place ad dollars in Q1 2008.

This reality probably explains Arrington’s post, I think.

Ultimately, in publishing, it’s not even what you say, it’s that fact that you say something, and that you get others talking about it. For that reason, I am sure that all of these blogger entrepreneurs will be fine, but adding 10 technology blogs together does not seem like a smart thing, if you ask me…

As per toppling CNET Mike, leave that to Jana. Oh wait, you are a lawyer, too. Who knows, maybe this is the latest lobby in Tech Crunch/CNET’s M&A dance?

Anyway, who was #1 in that Elite Eight Tech Oriented blog networks?

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Posted By: Ashkan Karbasfrooshan | Mar 19th

3 Responses to “M&A Amongst Blog Networks and The Case Against VC Funding in Blogs?”

  1. Anonymous Says:
    March 19th, 2008 at 10:55 pm

    Hi Ash,

    I was wondering what you thought of this article given your claim about criticizing VCs 24/7.

    http://www.instigatorblog.com/dissing-venture-capitalists-is-so-cool/2008/03/17/

    Do you think your stance has hurt your funding efforts?

  2. Ashkan Karbasfrooshan Says:
    March 19th, 2008 at 11:16 pm

    Funny you ask that, I am writing a post called “blogging: does it actually help or hurt your business?” - I will include a paragraph on its impact on funding.

    Stay tuned.

  3. Ashkan Karbasfrooshan Says:
    March 19th, 2008 at 11:21 pm

    In the meantime, the fact that I’ve yet to raise a penny in funding from a VC boils to these two posts, more than anything else:

    http://watchmojo.com/web/blog/index.php/2007/12/24/why-do-entrepreneurs-accept-vcs-draconian-rules-of-engagement/

    http://watchmojo.com/web/blog/index.php/2007/09/05/the-biggest-mistake-vcs-and-entrepreneurs-make-bulls-make-money-bears-money-but-hogs-get-slaughtered/

    the second link in particular drives VCs nuts.

    third, for fun:

    http://watchmojo.com/web/blog/index.php/2008/02/20/why-most-vc-backed-ad-supported-companies-are-doomed-to-fail/

    but like i said, i am working on a post on how blogging impacts your actual business duties… and whether or not this affects fundraising in a positive or negative way.

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